As part of its annual review of federal budget projections (a dismal document which all Americans should be required to read for its frightening implications) the Congressional Budget Office updated its projections on the effects of the health reform law. (CBO Report) The bottom line is that over ten years the net cost to the government of the coverage provisions will be $1.2 trillion dollars, less than they estimated in January 2015. The agency is estimating that health insurance premiums, in particular ones for the plan type that federal subsidies are tied to, will be lower than previously believed, resulting in lower subsidies; and that slightly fewer persons will enroll in insurance than earlier estimates showed. The CBO thinks that insurance premiums per capita will only rise 2.2% from 2014 to 2018 and 3.1% from 2019 to 2025, excluding the effects of general inflation and demographic mix changes. The flaw in these projections is that much of the slowdown in premium growth is due to greatly increased cost-shifting, which has meant that premium increases have been lower than actual medical cost increases. That cannot and won’t continue. We are likely nearing the amount of cost-shifting that employees and individual plan members can bear. So I will be shocked if premium increases over the next ten years average what CBO is suggesting. In actual dollar terms, taking all factors into account, CBO believes that the average cost of the silver plans to which subsidies are tied will increase 8.5% from 2016 to 2018. This is a pretty substantial jump, one for which consumers are probably not well prepared. In terms of insurance coverage sources, the agency has lowered its projections of how many people will lose employment-based insurance and of how many people will enroll in Medicaid and through the exchanges. One item that jumps out from the report is that CBO says that the number of people enrolled through the exchanges will jump from about 11 million in 2015 to 21 million in 2016. That also seems extremely unlikely. After two years, I think we probably have about all the people we are going to get in the exchanges, and a ten million person jump in one year needs some explanation. Finally, even if the CBO were correct about the number of Americans who will sign up through the exchanges, we are still left with 20 to 30 million uninsured people, far more than the Administration’s promise that everyone would have coverage.
✅ Subscribe via Email
About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
Healthy Skeptic Podcast
This is an outstanding report on total global drug spending and trends, with projections out to 2025. It helps you understand this important area of health care, which does much...
June 1, 2021
MedPAC 2019 Report to Congress
June 18, 2019
Cano Health apparently cannot, as it declares bankruptcy due to too much debt. Building primary care centers to serve Medicare, Medicaid and commercial populations, which is Cano’s business, was hot...
February 6, 2024
Turquoise health raises a fresh $30 million in capital for its price transparency platform, as the market for funding health care companies isn’t quite dead yet.
January 24, 2024
I am co-f0under of a company that manages cell and gene therapy for health plans. Cell therapy has made a big difference for many cancer patients but like all new...
January 24, 2024
Access ACO Care Management Chronic Disease Comparative Effectiveness Consumer Directed Health Consumers Devices Disease Management Drugs EHRs Elder Care End-of-Life Care FDA Financings Genomics Government Health Care Costs Health Care Quality Health Care Reform Health Insurance Health Insurance Exchange HIT HomeCare Hospital Hospital Readmissions Legislation M&A Malpractice Meaningful Use Medicaid Medical Care Medicare Medicare Advantage Mobile Pay For Performance Pharmaceutical Physicians Providers Regulation Repealing Reform Telehealth Telemedicine Wellness and Prevention Workplace